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it is a representation of reputation on the forums.
based on your posts you can receive positive or negative reputation from the other users. you can see both of these in your user control panel, and also your total reputation points.
as for does it have a purpose? no, and I'm glad it's made very unnoticeable on these forums, as some certain other sites *cough* got a little too carried away with rep when it was noticeable.
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